First Citizens National Bank - 15 South Main Street - Mansfield, PA 16933 - 570-662-0422 - Fax: 570-662-8512
For Immediate Release
October 15, 2003
Contact: Kathleen Campbell, Senior Vice President, Marketing Director
570-662-0422
Fax: 570-662-8512
CITIZENS FINANCIAL SERVICES, INC. REPORTS THIRD QUARTER EARNINGS
Mansfield, PA - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its financial performance through September 30, 2003. Total assets increased $13.1 million to $445.8 million since December 31, 2002. Total liabilities increased $13.4 million to $407.7 million from $394.3 million during the same period. Total loans increased $15.6 million, or 5.2% to $314.1 million, while total deposits increased $13.3 million, or 3.6%, to $386.3 million during the same period. Earnings for the three-month and nine-month periods ending September 30, 2003 were $806 thousand and $3.6 million, respectively, as compared to $1.4 million and $4.2 million for the same periods ending September 30, 2002. Earnings per share for the quarter ending September 30, 2003 are $.28 per share as compared to $.50 per share for the same quarter of 2002. Likewise, year-to-date earnings per share through September 30, 2003 are $1.25 as compared to $1.47 for the same period last year. The consulting and non-compete agreement provided to the organization's retiring president has had a considerable impact on third quarter earnings. More details are provided below.
Core earnings remained stable which allowed our total stockholders' equity to moderately grow from $37.6 million one year ago to $38 million this year. At its regularly scheduled meeting on October 7, 2003, the Board of Directors of Citizens Financial Services, Inc., declared a cash dividend of $.19 per share payable on October 31, 2003, to its shareholders of record of October 17, 2003. This dividend represents an 8.5% increase over the dividends paid one year ago.
The Board of Directors recently entered into a consulting and non-compete agreement with Richard E. Wilber, President and CEO of Citizens Financial Services, Inc. and First Citizens National Bank which goes into effect upon Mr. Wilber's retirement on September 30, 2003. As part of the consulting and non-compete agreement, Mr. Wilber will provide consulting services at the request of the Board of Directors and will adhere to certain non-compete provisions. The financial impact of this agreement is an after-tax charge to earnings of approximately $554,500 in the third quarter of 2003. As a result, the third quarter earnings per share are $.28 per share. Without the effect of this charge to the third quarter earnings, earnings per share for the third quarter would have been approximately $.48.
Inquiries regarding the purchase of the company's stock may be made through the following brokers: Ferris Baker Watts, Inc. 410-659-4600: Ryan, Beck & Co., 800-223-6807; Herzog, Heine, Geduld, Inc., 212-908-4000; Baird Patrick & Co., 212-493-6600; F.J. Morrissey & Co., Inc., 215-563-8500; Monroe Securities, Inc., 800-766-5560; Knight Secs LP, 212-336-8790; GVR Co., 800-638-8602; Hill Thompson Magin & Co., 800-631-3083; and Powell (EE) & Co., Inc., 412-391-4594.
Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties. First Citizens National Bank has offices in Genesee, Ulysses, Wellsboro, Weis Market (Wellsboro), Mansfield, Wal-Mart (Mansfield), Blossburg, Canton, Troy, Towanda, LeRaysville, Sayre, Gillett and Millerton.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
CITIZENS FINANCIAL SERVICES, INC. | |||
CONSOLIDATED BALANCE SHEET | |||
(UNAUDITED) | |||
September 30 | December 31 | September 30 | |
(in thousands, except per share data) | 2003 | 2002 | 2002 |
ASSETS: | |||
Cash and due from banks: | |||
Noninterest-bearing | $ 10,242 | $ 11,173 | $ 11,859 |
Interest-bearing | 317 | 421 | 4,381 |
Total cash and cash equivalents | 10,559 | 11,594 | 16,240 |
Available-for-sale securities | 91,822 | 100,725 | 106,312 |
Loans (net of allowance for loan losses of $3,587, $3,621 and $3,486) | 310,511 | 294,836 | 288,325 |
Premises and equipment | 10,775 | 11,134 | 11,440 |
Accrued interest receivable | 1,741 | 1,976 | 2,038 |
Goodwill | 6,905 | 6,905 | 6,905 |
Core deposit intangible | 1,087 | 1,413 | 1,521 |
Bank owned life insurance | 7,064 | - | - |
Other assets | 5,319 | 4,075 | 4,741 |
TOTAL ASSETS | $ 445,783 | $ 432,658 | $ 437,522 |
LIABILITIES: | |||
Deposits: | |||
Noninterest-bearing | $ 44,401 | $ 40,143 | $ 39,590 |
Interest-bearing | 341,924 | 332,908 | 340,000 |
Total deposits | 386,325 | 373,051 | 379,590 |
Borrowed funds | 17,351 | 17,027 | 15,987 |
Accrued interest payable | 1,683 | 2,077 | 1,900 |
Other liabilities | 2,380 | 2,097 | 2,451 |
TOTAL LIABILITIES | 407,739 | 394,252 | 399,928 |
STOCKHOLDERS' EQUITY: | |||
Common Stock | |||
$1.00 par value; authorized 10,000,000 shares; issued | |||
2,909,849 and 2,882,070 shares in 2003 and 2002, respectively | 2,910 | 2,882 | 2,882 |
Additional paid-in capital | 10,213 | 9,473 | 9,474 |
Retained earnings | 25,663 | 24,447 | 23,553 |
TOTAL | 38,786 | 36,802 | 35,909 |
Accumulated other comprehensive income | 1,263 | 2,553 | 2,634 |
Less: Treasury Stock, at cost | |||
96,962 and 55,162 shares in 2003 and 2002, respectively | (2,005) | (949) | (949) |
TOTAL STOCKHOLDERS' EQUITY | 38,044 | 38,406 | 37,594 |
TOTAL LIABILITIES AND | |||
STOCKHOLDERS' EQUITY | $ 445,783 | $ 432,658 | $ 437,522 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED STATEMENT OF INCOME | ||||
(UNAUDITED) | ||||
(in thousands, except per share data) | 2003 | 2002 | 2003 | 2002 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 5,439 | $ 5,461 | $ 16,158 | $ 16,071 |
Interest-bearing deposits with banks | 6 | 27 | 27 | 58 |
Investment securities: | ||||
Taxable | 703 | 1,178 | 2,468 | 3,684 |
Nontaxable | 105 | 143 | 363 | 495 |
Dividends | 76 | 85 | 235 | 278 |
TOTAL INTEREST INCOME | 6,329 | 6,894 | 19,251 | 20,586 |
INTEREST EXPENSE: | ||||
Deposits | 2,075 | 2,459 | 6,504 | 7,623 |
Borrowed funds | 74 | 98 | 223 | 290 |
TOTAL INTEREST EXPENSE | 2,149 | 2,557 | 6,727 | 7,913 |
NET INTEREST INCOME | 4,180 | 4,337 | 12,524 | 12,673 |
Provision for loan losses | 120 | 90 | 375 | 300 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR LOAN LOSSES | 4,060 | 4,247 | 12,149 | 12,373 |
NON-INTEREST INCOME: | ||||
Service charges | 779 | 822 | 2,261 | 2,334 |
Trust | 142 | 148 | 437 | 430 |
Other | 191 | 165 | 552 | 682 |
Gains on loans sold | 100 | 42 | 326 | 86 |
Realized securities gains, net | 114 | 38 | 514 | 254 |
TOTAL NON-INTEREST INCOME | 1,326 | 1,215 | 4,090 | 3,786 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 2,680 | 1,905 | 6,516 | 5,426 |
Occupancy | 252 | 240 | 770 | 745 |
Furniture and equipment | 179 | 211 | 533 | 683 |
Professional fees | 183 | 139 | 487 | 429 |
Amortization | 109 | 109 | 326 | 349 |
Other | 1,088 | 967 | 3,120 | 2,995 |
TOTAL NON-INTEREST EXPENSES | 4,491 | 3,571 | 11,752 | 10,627 |
Income before provision for income taxes | 895 | 1,891 | 4,487 | 5,532 |
Provision for income taxes | 89 | 460 | 935 | 1,326 |
NET INCOME | $ 806 | $ 1,431 | $ 3,552 | $ 4,206 |
OPERATING CASH EARNINGS** | $ 878 | $ 1,503 | $ 3,768 | $ 4,437 |
Earnings Per Share | $ 0.28 | $ 0.50 | $ 1.25 | $ 1.47 |
Cash Dividend Declared | $ 0.185 | $ 0.170 | $ 0.550 | $ 0.505 |
Financial Highlights (In thousands, except per share and ratio data.) | ||
(Unaudited) | ||
Nine Months Ended September 30 | ||
` Net income | ||
Comprehensive income | $ 3,552 | $ 4,206 |
Per common share data: | 2,262 | 5,628 |
Earnings per share | ||
Cash dividends declared | 1.25 | 1.47 |
Performance ratios: | 0.55 | 0.505 |
Return on average assets | ||
Return on average equity | 1.09% | 1.32% |
12.86% | 16.71% | |
Three Months Ended September 30 | ||
Net income | ||
Per common share data: | $ 806 | $ 1,431 |
Earnings per share | ||
Cash dividends declared | 0.28 | 0.50 |
Performance ratios: | 0.185 | 0.17 |
Return on average assets | ||
Return on average equity | 0.73% | 1.32% |
8.60% | 16.61% | |
At September 30 | ||
Assets | ||
Investment securities: | $445,783 | $ 437,522 |
Available-for-sale | ||
Loans (net of unearned income) | 91,822 | 106,312 |
Allowance for loan losses | 314,098 | 291,811 |
Deposits | 3,587 | 3,486 |
Stockholders' Equity | 386,325 | 379,590 |
Non-performing assets | 38,044 | 37,594 |
Average leverage ratio | 2,302 | 2,845 |
Per common share data: | 6.59% | 6.25% |
Book value | ||
Market value (average of bid/ask price) | $ 13.53 | $ 13.30 |
Market price to book value ratio | 25.13 | 19.68 |
185.70% | 147.97% |